The EU is inching closer to new rules on vetting countries’ debt levels but is still struggling with the controversial prospect of changing the treaties, according to a draft report by a special task force on economic governance, seen by EurActiv.

The task force, made up of the EU’s 27 finance ministers, will thrash out proposals on Monday (18 October) to reform the bloc’s economic governance in the wake of the Greek debt crisis.

The group, chaired by European Council President Herman Van Rompuy, wants tougher rules to prevent debt levels from spiralling out of control and proposes introducing sanctions for countries who fail to reduce them.

The group’s final draft report, obtained by EurActiv, reveals broad agreement among EU countries on how to strengthen budget discipline but leaves unanswered questions on treaty change to accommodate tougher rules, demanded by Germany.

In a move likely to accommodate the wishes of the UK and France, the report says the new rules will apply in a two-stage approach, with the more stringent ones applying to the 16-member euro zone.

The first stage will see interest-deposits and fines introduced “only for the euro area”. In a second stage, strengthened enforcement measures will be implemented “for all EU member states, except the UK” and “as soon as possible,” according to the draft.

An EU source said the report was very close to the final version Herman Van Rompuy will present to leaders at a summit on 28 October.

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